Short Sales Do Work for First-time Homebuyers

Posted on 28 January 2012 by Aaron Hofmann

You’ve probably read lots of horror stories online about how long a short sale can take, but what you probably don’t read about are all the short sales that close without any issue. Why is that? It’s probably just human nature to want to voice complaints more than shouting out to the world about the great deal you just got.

For Atlanta first-time home buyers, purchasing your first home can be stressful. But a short sale could fit the bill for a first-time homebuyer who has patience and flexibility. A short sale is a pre-foreclosure home, one in which the homeowner is asking the lender to take less than is owed on the mortgage balance in order to sell it before it is foreclosed. Atlanta short sale homes are generally priced aggressively for the market and represent good deals. However, short sales are complex and can  take a lot of time.

Unlike with a foreclosure, the bank generally hasn’t made a decision on the value of the home before it is listed. So all the review and valuation process comes after they receive the buyer’s offer. With a foreclosure, this is all done before it comes back on the market as an REO property, so the buyer never goes through that portion of the process when looking at foreclosed homes. In general, you can expect to wait 2-3 months to get a response from the bank on your offer, but it will vary from property to property. There are a lot of factors that go into making a decision on a short sale.

But in general, first-time homebuyers should definitely consider short sales because they offer a great opportunity to get a home at a discounted price. In fact, first-time homebuyers often have more flexibility than move-up homebuyers and are actually better positioned to not just be patient, but also be flexible in terms of when they actually close on their new home. Buyers who need to move within a specific timeline aren’t necessarily good short sale buyers, say a homeowner whose home just went under contract and is closing in 45 days. Unless they want to find temporary housing, then a short sale is really not an option for them. Conversely, most first-time home buyers are currently leasing and have the option to extend their lease a month or two if needed to ensure they get that great deal.

We see more short sales in today’s market than foreclosures as the banks try to be more proactive. So to exclude short sales, will definitely limit your purchase options. So whether you’re looking for a Smyrna short sale, Roswell short sale or a short sale in East Cobb, there are lots of opportunities that you don’t want to overlook.

One important aspect to realize about short sales is, that much like foreclosures, the property is typically sold as-is, which means the seller won’t make repairs. In many homes this isn’t the issue as a large percentage of short sales are actually fairly new homes having been purchased when the market was at it’s hottest. We tend not to see as many repair issues in a five year old home as we might in a 15 year old home. Despite a short sale being sold as-is, we always structure our offers so that an Atlanta short sale buyer can inspect the property and if the repair items are too significant, then they can get out of the contract.

The real key to buying a short sale is to ensure the buyer’s agent and the listing agent are experienced with short sales.  First-time buyers should interview real estate agents to find a buyer’s agent with short-sale experience in addition to a deep knowledge of the local real estate market, so they recognize the value in a specific property. Buyers should choose an agent with experience in their price range, so they will know whether the offer is in line with current market conditions.

If you’re interested in pursuing Atlanta short sales, don’t hesitate to contact us. We are short sale specialists and ready to help you find your new home. We also offer a complimentary search of all Atlanta distressed properties. The search tool will allow you to strictly search Atlanta short sales or foreclosures if you want.

 

 

 

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